Opinion
13 Civ. 2386 (WHP)
08-14-2013
SHARON ISAACS, individually and on behalf of a class, Plaintiff, v. MALEN & ASSOCIATES, P.C. Defendant.
Counsel of Record: William Franklin Horn, Esq. Law Office of William F. Horn 188-01B 71st Crescent Fresh Meadows, NY 10013 Counsel for Plaintiff Jeffrey Stephen Wolstein, Esq. Adam Hughes, Esq. Malen & Associates, P.C. 123 Frost Street Westbury, NY 11590 Counsel for Defendant
MEMORANDUM & ORDER
:
On August 9, 2013, this Court held a conference regarding Plaintiff Sharon Isaacs' application to file an Amended Complaint. The proposed Amended Complaint expands Isaacs' theory of Defendant Malen & Associates' violations of the FDCPA, 15 U.S.C. § 1692 et seq., and adds state law claims pursuant to N.Y. Jud. Law § 487 and N.Y. Gen. Bus. Law § 349. Isaacs also seeks to add individual Defendants who are attorneys and employees at Malen. For the following reasons, and for the reasons stated on the record, Isaacs' application is granted.
"When a party requests leave to amend its complaint, permission generally should be freely granted." Anderson News, L.L.C. v. American Media, Inc., 680 F.3d 162, 185 (2d Cir. 2012); see also Fed. R. Civ. P. 15(a)(2). Nevertheless, leave to amend "may properly be denied for: undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment[.]" Ruotolo v. City of New York, 514 F.3d 184, 191 (2d Cir. 2008). A proposed amended complaint is futile "when the proposed new pleading fails to state a claim on which relief can be granted." Anderson News, 680 F.3d at 185.
Malen contends that Isaacs' amendments are futile, because Malen provided the Plaintiff with a Rule 68 offer of judgment for $1,000—the full amount of statutory damages available under the FDCPA for her individual claim, plus costs and attorney's fees. Malen argues that under Ambalu v. Rosenblatt, 194 F.R.D. 451 (E.D.N.Y. 2000), an offer of judgment encompassing all Isaacs "could hope to recover" moots her claims. Ambalu, 194 F.R.D. at 453. In Ambalu, because the plaintiff's claim was mooted before class certification, the court determined it had no subject matter jurisdiction over the class claims and dismissed the action. See Ambalu, 194 F.R.D. at 453.
However, "district courts in this Circuit are split as to whether a case should be dismissed for lack of subject matter jurisdiction when a Rule 68 offer for full relief to the named plaintiff is made prior to the filing of a motion for class certification[.]" Morgan v. Account Collection Tech., LLC, No. 05-CV-2131 (KMK), 2006 WL 2597865, at *4 (S.D.N.Y. Sept. 6, 2006). Before determining that the class claims are moot, some courts have considered the timing of the offer of judgment, and "the diligence of the plaintiff in pursuing class certification to determine if the plaintiff had a reasonable opportunity to file for certification or if there has been undue delay." Morgan, 2006 WL 2597865, at *4. See, e.g., Schaake v. Risk Mgmt. Alts., Inc., 203 F.R.D. 108 (S.D.N.Y. 2001); McDowall v. Cogan, 216 F.R.D. 46 (E.D.N.Y. 2003). Here, as in Schaake, the offer of judgment was made very early in the litigation "well before plaintiff could be reasonably expected to file its class certification motion." Schaake, 203 F.R.D. at 112. This Court agrees with Judge McMahon's reasoning in Schaake, that "[t]aken to its absurd logical conclusion, the policy urged by defendant would clearly hamper the sound administration of justice, by forcing a plaintiff to make a class certification motion before the record for such motion is complete" and "would also allow defendants to essentially opt-out of Rule 23, by allowing a defendant to avoid liability for class wide relief, which could be prevented by the mere service of a Rule 68 offer at the outset of the case." Schaake, 203 F.R.D. at 112. Because Isaacs could not reasonably have been expected to move for class certification this early in the litigation, this Court finds that the offer of judgment does not moot the claims in the proposed Amended Complaint.
Malen also contends that Isaacs' new claims are futile because they are conclusory and fail to state a claim upon which relief can be granted. This Court finds that the new claims are not futile. Courts have allowed similar theories of FDCPA liability to advance past the pleading stage, see Sykes v. Mel Harris & Assocs., LLC, 757 F. Supp. 2d 413 (S.D.N.Y. 2010) and Diaz v. Portfolio Recovery Assocs., LLC, No. 10 CV 3920 (MKB) (CLP), 2012 WL 1882976 (E.D.N.Y. May 24, 2012). Accepting all facts in the Amended Complaint as true and drawing all reasonable inferences in Isaacs' favor, she plausibly alleges that Malen has a business practice of submitting false affidavits in support of motions and other legal documents that are not meaningfully reviewed by attorneys, in violation of the FDCPA and state law. These allegations are not conclusory: Isaacs attaches a copy of the summary judgment motion and affidavit she contends is in violation of the FDCPA and alleges that Malen has filed thousands of lawsuits despite employing only three attorneys. See Sykes, 757 F. Supp. 2d at 424 (legal documents supported by "affidavits that contained false or deceptive representations about the status and character of the debt" violate the FDCPA); Diaz, 2012 WL 1882976, at *5 ("The allegations in the amended complaint—that Defendant filed over 13,000 complaints in 2009 alone and that Wolstein signed over one third of those complaints—establish a pattern of deceptive filings.").
This Court also finds that there is no basis to deny leave to amend for undue delay, prejudice or bad faith. As such, Isaacs' application to file the proposed Amended Complaint is granted. Dated: August 14, 2013
New York, New York
SO ORDERED:
/s/_________
WILLIAM H. PAULEY III
U.S.D.J. Counsel of Record: William Franklin Horn, Esq.
Law Office of William F. Horn
188-01B 71st Crescent
Fresh Meadows, NY 10013
Counsel for Plaintiff Jeffrey Stephen Wolstein, Esq.
Adam Hughes, Esq.
Malen & Associates, P.C.
123 Frost Street
Westbury, NY 11590
Counsel for Defendant